Brokers unite to oppose reform

By LII editorial May 11, 2009

A coalition led by the US Council of Insurance Agents and Brokers (CIAB) has been formed to oppose the swift implementation of health insurance reform, a key objective of President Barack Obama and Democrat Party leaders. If approved the impact on private health insurers and brokers could be devastating.

As matters now stand, reform centred on the proposed creation of a public health plan will be included in the reconciliation of the 2010 budget announced by the president in February 2009.

In essence, during the budget reconciliation process a proposal requires only 51 votes in its favour in the Senate to be approved. With the Democratic Party holding 58 seats in the Senate approval of a public health plan would be assured.

Coalition members have voiced concern over the rapidity of the process.

In a joint statement sent to the members of Congress and Senate sitting on Federal budget committees, the coalition said: “We fear the spirit of bipartisan cooperation

will be lost if regular order is put aside and the reconciliation process is utilised to

fast-track health care reform legislation.”

In addition to the CIAB, members of the coalition are the National Association of Insurance and Financial Advisors, the Independent Insurance Agents & Brokers of America and the National Association of Health Underwriters.

Underscoring the coalition’s concerns is a statement by Nancy Ann DeParle, the director of the White House Office of Health Reform.

“A public plan is something that is sponsored by the government and therefore has very low or almost non-existent administrative costs compared to others,” said DeParle in the statement published on 19 April.

“As such, the plan does not have the need to have brokers out selling, it would not have the need to have a lot of cost and profits the way private plans would, so it has that advantage.”

Under current proposals for creation of a public health plan consultancy The Lewin Group estimates that the private health insurance industry could loose between 10.4 million and 32 million members (see LII 234).